Moneyweek editor-in-chief Merryn Somerset Webb wrote an article recently about the widening wealth gap between generations in Britain, depicting a situation resembling that in Hong Kong.
Webb said every time she talks about generational inequality, baby boomers often don’t agree, pointing to the fact they worked hard and saved hard to earn a decent retirement.
But can young people today achieve the same result if they follow in the footsteps of the previous generation?
Quoting the Institute for Fiscal Studies, Webb pointed out that 80 percent of Britons who are over 65 years old own one or more properties, and many of them no longer have mortgages.
By contrast, only 34 percent of thirtysomethings own a property, down from 60 percent in 1994.
Webb argued that working hard and saving up won’t be able to close the yawning gap.
Lower inflation, falling interest rates and asset appreciation are also important factors why the previous generation did much better.
Statistics show that people aged 55-65, who make up 18 percent of Britain’s population, control about 30 percent of the country’s wealth.
The financial prospects of British youth, and their counterparts in Hong Kong as well, aren’t too rosy, as they grapple with a surge in home prices that has far outstripped wage growth, as well as the high valuations of stocks, which means a low probability of getting high returns from investing in the market.
This article appeared in the Hong Kong Economic Journal on May 11.
Translation by Raymond Tsoi
[Chinese version 中文版]
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